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OCTOBER 2000 INVESTMENT AND FINANCE COMMITTEE
MEETING AGENDA WORKSHEET Meeting Description Investment Committee Meeting Date%GILT Time 11:00 p.m. Location North Wing Conference Room Mailed Agenda 1V posted Agenda Time YD V Convene Adjournment T I B � � Members Attending Yes No Others Attending _ Yes No 1 Paul Gibson, Chairperson 1/ 1 2 Russ Campbell X 2 3 Carlos Ortega, CM 3 4 Buford Crites 4 5 son 5 6 Thomas Jeffrey 6 7 Murray Magloff 7 8 Bill Veazie B 9 Gregg Lindquist 9 10 Dave Erwin 10 11 �fT� 11 12 NL 12 13 13 14 Items To Be Discussed Person Responsible Material 1 2 3 4 5 6 7 8 9 .. ®® MEETING NOTES x4rff' l.ad �1��l, 3a Spoke- ; Mtn (1 p, Mtn(2) "' MEETING NOTES ';a ` ce- i� - qvc O /7XJ wo zizw k, �T- 9 — �l �7 LL�L GCe � %p 9 - ✓ .. =I • _�i PRIM ff i r -R *oke' f 'Mtn (1)- Mtn (2) +_ ''. MEETING NOTES.. �. Atf, �1 07 / fh. i Spoke. `. Mtn (1),; tvtTn,(2) , ..;�". . '�_�.��c,".sMEETING NOTES- t�r���s �?.��` Spoke ''r,Mtn(1) .Mtri;(2) ,3,, _ ,MEETI.NG NOTESF 'a w' vra Agenda INVESTMENT & FINANCE COMMITTEE Wednesday, October 18, 2000 - 11:00 a.m. North Wing Conference Room I. CALL TO ORDER II. ROLL CALL III. APPROVAL OF MINUTES - September 20, 2000 Rec: Approve minutes of the regular meeting of September 20, 2000, as submitted Action: IV. ORAL COMMUNICATIONS A. Any person wishing to discuss any item not otherwise on the agenda may address the Investment & Finance Committee at this point by giving his or her name and address for the record. Remarks shall be limited to a maximum of five minutes unless additional time is authorized by the Chairman. B. This is the time and place for any person who wishes to comment on non-hearing agenda items. It should be noted that at the Investment & Finance Committee's discretion, these comments may be deferred until such time on the agenda, as the item is discussed. Remarks shall be limited to a maximum of five minutes unless additional time is authorized by the Chairman. V. OLD BUSINESS A. Status of Public and Private Partnerships Background Checks Rec: Report by Redevelopment Manager Dave Yrigoyen Action: B. Bond Issuance by Palm Desert Financing Authority Rec: Status Report on issuing new bonds presented by Dave Yrigoyen Action: AGENDA - INVESTMENT & FINANCE COMMITTEE October 18, 2000 Page 2 VI. NEW BUSINESS A. City and Redevelopment Agency Investment Schedules and Summary of Cash Reports for September 2000 Rec: Review and submit to the next City Council agenda. Review the presentation on the investment graphs. Review the investment activity for September 2000. Review status of capital projects and cash-flow projections. Action: B. Review Short Term Investments Maturing in October 2000 Rec: Review investments in 1) collateralized deposits; 2) treasury bonds and notes; and, 3) agencies discount notes Action: C. State of California Local Agency Investment Fund Monthly Report for August 2000 Rec: Informational item for the Committee to review. No action required D. City and Redevelopment Agency Monthly Financial Reports for City Council for September 2000 Rec: Report and submit to City Council Action: E. Parkview Professional Office Buildings - Financial Report for September 2000 Rec: Review and file report Action: F. Desert Willow Golf Resort Financial Information for August 2000 Rec: Review and file report Action: G. Palm Desert Recreation Facilities Corporation Income Analysis for August 2000 Rec: Review and file report Action: AGENDA - INVESTMENT & FINANCE COMMITTEE October 18, 2000 Page 3 H. Dismissal of Broker-Dealer Rec: Approve dismissal of Union Bank Capital Markets as a Broker for the City, based upon a failure to submit documents for annual requalification, pursuant to City Treasury Policy No. 7, Section 1.10. Action: IJ. City Sponsorship of Investment Clean-Up Legislation Rec: Approve City sponsorship of investment clean-up legislation during the 2001 California Legislative Session, that focuses on the elimination of duplicate Government Code sections and on the simplification of the commercial paper section. Action: K. Resolution for Park View Office Complex Rec: Approve Resolution Approving Payment by the Park View Office Complex to the City's General Fund to Cover Park View's Portion of the Civic Center Park Maintenance and Landscaping Costs. Action: VII. REPORTS AND REMARKS A. Reports and Remarks by any Committee Member B. Items to be placed on the next agenda Vill. INFORMATIONAL ITEMS A. Recently Enacted Local Government Finance Legislation B. Committee/Commission Holiday Party IX. NEXT MEETING - Wednesday, November 15, 2000, at 11:00 a.m. AGENDA - INVESTMENT & FINANCE COMMITTEE October 18 2000 Page 4 X. ADJOURNMENT I hereby certify under penalty of perjury under the laws of the State of California, that the foregoing agenda for the Palm Desert Investment and Finance Committee was posted on the City Hall bulletin board not less than 72 hours prior to the meeting. Dated this October 12, 2000. ra Bradley, Recording Se ry ���•v INVESTMENT AND FINANCE COMMITTEE / 1 1 Minutes September 20, 2000 CALL TO ORDER A regular meeting was called to order by Finance Director Paul Gibson on Wednesday, September 20, 2000, at 11:00 a.m. ROLL CALL Present were the following members, constituting a quorum: Finance Director Paul Gibson, Mayor Buford Crites, City Council Member Bob Spiegel, Acting City Manager Carlos Ortega, Investment Manager Thomas Jeffrey, Redevelopment Manager Dave Yrigoyen, Russ Campbell and Murray Magloff Absent were the following members: Mayor Pro- Tempore Jim Ferguson, City Attorney Dave Erwin and Bill Veazie Also, present were: Dennis Coleman, Gregg Lindquist and Recording Secretary Debra Bradley ORAL None. COMMUNICATIONS APPROVAL OF Upon motion of Mr. Campbell, seconded by Mr. MINUTES Ortega, and by unanimous vote, the minutes of the July 19, 2000,meeting were approved as submitted. OLD BUSINESS A. Status of Public and Private Partnerships Background Checks Paul advised that at its September 14, 2000, City Council approved the transfer of loan administration for Home Improvement Program and low-income housing grants. Currently, there are two applications in the process of being completed for providing said services. It was noted that the applicants are private firms, not banks. Bank of America has agreed to extend one more month for processing the loans. B. Bond Issuance by Palm Desert Housing Authority A lengthy report was presented by Mr. Coleman Investment and Finance Committee Minutes of September 20, 2000 Page 2 regarding issuing bonds for Project Area No. 2. He explained four different scenarios in reference to the financing needs of obligations of the hotels; Scenario 1) issuing a taxable bond issue at parity with the other debt outstanding; Scenario 2) taxable subordinate at 1.20 coverage; Scenario 3)tax-exempt refunding of the existing debt down to 1.25 coverage with a new taxable bond issue; Scenario 4)extending the maturities on the tax exempt refunding and issuing a new taxable bond issue. Mr. Coleman briefed that Staff has begun working with a consultant on the housing report. In reference to rates, it was pointed out that they are looking into an insured taxable rate which, in the abovementioned scenarios, allows a 8.6% to 8.7% rate. A brief update was given on the growth of Project Area No. 4. NEW BUSINESS A. City and Redevelopment Agency Investment Schedule for July/August 2000 Mr. Jeffrey presented an overview of economic trends since the last Finance Committee meeting. The City and RDA Portfolio reports for the months of July and August 2000 were then distributed and filed. The book value of the City investment portfolio for the period ended July 31, 2000 was approximately $173 million, an increase of $3.4 million over prior month. Liquid assets constituted 55% of the City portfolio. The book value of the Redevelopment Agency (RDA) investment portfolio for the period ended July 31, 2000 was approximately $151.8 million, an increase of $1.4 million over prior month. This was due to a transfer of funds from the City to RDA. Liquid assets constituted 62% of the RDA portfolio. The book value of the City investment portfolio for the period ended August 31, 2000 was approximately $178.4 million, an increase of $5.4 million over prior month. Liquid assets constituted 35% of the City portfolio--a 20%decrease from prior month due to$20 million worth of securities purchases. These purchases were premised upon the belief that interest rates had Investment and Finance Committee Minutes of September 20, 2000 Page 3 peaked for the remainder of the calendar year. The book value of the Redevelopment Agency (RDA) investment portfolio for the period ended August 31, 2000 was approximately $150.9 million, a decrease of $900,000 from prior month. This was due to reimbursement to the City of clubhouse expenses. Liquid assets constituted 63% of the RDA portfolio. The Summary of Cash reports for the City and RDA for the month of August 2000, were distributed and filed. Mr. Gibson gave a recapitulation. B. Review Short-Term Investments Maturing in August/September 2000 Mr. Jeffrey briefed the Committee on securities that had matured or would be maturing in the City and RDA investment portfolios during the months of August and September 2000. C. State of California Local Agency Investment Fund Monthly Reports for June 2000 Report was filed with no discussion. D. Monthly Financial Report for City Council for July/August 2000 The July and August 2000 financial reports for the City, and the July 2000 report for the RDA, were received and filed with no discussion. E. Parkview Professional Office Buildings - Financial Reports for June/July/August 2000 Mr. Gibson informed that Golf Dimensions has been delaying in their efforts to vacate the premises,to which Mayor Crites directed Mr. Gibson to advise to Golf Dimensions the legal ramifications, should they not vacate. Mr. Gibson agreed to advise thereof. F. Desert Willow Golf Resort Financial Information for June/July 2000 For the month of June 2000, Mr. Lindquist reported Investment and Finance Committee Minutes of September 20, 2000 Page 4 exceeding objections in rounds of golf by 65%. This generated an increase in revenue of 69%, however, created expenses in food and beverage, payroll and equipment rentals. It was noted that the approval of the capital budget will eliminate the procurement of equipment rentals in the upcoming season. Overall, there was a 7.6% increase in expenses. Net operating income was $229,160. It was emphasized that while this was $200,000 less than projected, inclusively the year was successful. A lengthy discussion followed related to evening meals. As related to expenses, Council Member Spiegel inquired on the cost of services for evening meals, to which Mr. Lindquist advised that this item is going to be addressed to the Golf Course Committee. For cost factors, it is recommended that only theme dinner events be offered. For the month of July 2000, rounds were down 6%. A contributing factor was the discounting golf rates by neighboring golf resorts. Revenue fell shortby$39,000. Food and beverage created a cause for concern, but Kemper is corporately acting upon to make changes. In sum, July was not a satisfactory month, according to Mr. Lindquist. It was announced that accountant Margo Perry gave her resignation, effective September 29, 2000. In concluding, Mr. Gibson noted that in accordance with the agreement with Kemper, if cash falls below $500,000, Kemper agrees to replenish funds. G. Palm Desert Recreation Facilities Corporation Income Analysis for June/July 2000 Mr. Gibson recalled the purpose of the Corporation, which was established because of the ABC license. Based upon the findings of Attorney Bill Strausz, the Corporation cannot operate an alcohol license due to it being classified for private use, making the non-profit not appropriate. In order to meet IRS regulations, the Golf Course Committee agreed that the City will take the overall:golf course operations and fold it into this Corporation. Investment and Finance Committee Minutes of September 20, 2000 Page 5 H. Proposed Additions to Approved List - Commercial Paper Mr. Jeffrey discussed the eighteen firms that staff recommended for addition to the City's Approved List for Commercial Paper. All were well-capitalized, with high credit ratings, and global leaders in their industry. It was moved by Mr. Campbell, seconded by Council Member Spiegel and carried to add the proposed 18 firms to the Approved List for Commercial Paper. IJ. Proposed Additions to Approved List - Medium Term Notes Mr. Jeffrey discussed the four firms that staff recommended for addition to the City's Approved List for Medium-Term Notes. All were well-capitalized, with high credit ratings, and global leaders in their industry. It was moved by Mr. Campbell, seconded by Council Member Spiegel and carried to add the proposed four firms to the Approved List for Medium-Term Notes. K. Investment Ranking of City of Palm Desert Mr.Jeffreythen discussed the City's investment ranking with respect to other California cities. L. New Broker-Dealer: Merrill Lynch Mr. Jeffrey informed the Committee that Union Bank (UBOC) Capital Markets had failed to requalify as an authorized broker for the City. Despite three requests, UBOC had failed to provide the necessary documents. Mr. Jeffrey surmised that UBOC probably did not want to continue paying insurance premiums for special liability coverage in the event that it sold and cleared the same security. Mr. Jeffrey indicated that the loss of UBOC as a broker would severely limit the City's ability to buy corporate securities since UBOC had been its most prolific Investment and Finance Committee Minutes of September 20 2000 Page 6 provider. He noted, however, that UBOC's differential strength in this area was due to the fact that it was buying corporate securities from Merrill Lynch, marking them up, and reselling them to the City. Such activity was consistent with UBOC's role as a secondary broker. Merrill Lynch has the largest securities inventory in the world. In view of the foregoing and of highly favorable references that the City had received from other cities and from the State of California on Merrill Lynch's Corporate and Institutional Client Group in San Francisco, Mr. Jeffrey visited Merrill Lynch's San I Francisco office while he was in the Bay Area attending the California Municipal Treasurers's Association 2000 Annual Meeting. Based upon the favorable impression that he formed of the staff, he had suggested that they submit an application to do business with the City. During the 2000 qualification for new broker-dealers, Merrill Lynch submitted an application. One other brokerage firm, Securities America, had also requested consideration, but did not respond when it was sent a Request for Information (RFI). i Merrill Lynch had previously been an authorized broker- dealer for the City of Palm Desert from 1992 through 1996. The City had done a heavy volume of business with Merrill Lynch. Mr. Gibson commented that the relationship had been a good one,with no problems. Merrill Lynch, unfortunately, was unable to requalify in 1996 due to its inability to provide the necessary disclosures, as its law department tightened up in the wake of Orange County. Most of the Orange County litigation has now been dismissed or settled out of court. None of the individuals currently in Merrill Lynch's San Francisco Office were involved. Staff recommended that Merrill Lynch be approved as an authorized broker-dealerfor the City of Palm Desert. i ltwas moved byCouncil Member Spiegel,seconded Investment and Finance Committee Minutes of September 20, 2000 Page 8 Wednesday, October 18, 2000, at 11:00 a.m., in the North Wing Conference Room. ADJOURNMENT There being no further business, the meeting was adjourned by Mr. Gibson at 12:15 p.m. Respectfully submitted, � A Debra Bradley, Recording retary uTmwcc erml��wow wsrconnnuwlres 2M.,rya City of Palm Desert Portfolio Summary of Cash September 30 2000 Total Cash $ 173,614,541.72 Less Cash Restricted for: Assessment Districts'(1) $64,514,879.98 Special Revenue Fund(2) $23,474,791.68 Capital Projects(3) $ 25,596,813.44 Enterprise Fund(4) $ 2,083,888.91 Trust&Assessments(5) $ 1,467,730.18 Library Materials(6) $ 11,962.28 Loan to RDA(7) $ 31,002,916.95 $ 148,152,983.42 Less General Fund Reserved for: Equipment Replacement $ 2,494,478.00 Debt Service $ - Loans&Receivables $ 500,000.00 Self Insurance/Retiree Health $ 4,384,081.85 $ 7,378,559.85 Unrestricted Cash $ 18,082,998.45 .ZzTotal Cash ElAssessment Districts ■Special Revenue Fund ❑Capital Projects El Enterprise Fund ❑Trust &Assessments ■Library Materials ■Loan to RDA ❑Unrestricted Cash ®General Fund Reserved 37 6 ;14% MITI 15% 1% 4% 1% 0% 10% 18% (1)Funds are restricted to Assessment District Capital Improvement,Principal and Interest payments. (2)Funds have been restricted for specific purposes. Example: "Measure A"funds can be used only for street projects. (3)Funds have been appropriated for Capital Projects. Example:$10 Million for Westfield Shoppingtown parking structure. (4)Funds have restrictions on what they can be used for. (5)Funds held on deposit for developers and employees. (6)Funds restricted for library purposes. (7)RDA Loans-No payment schedule has been done. Payments are unknown. ' $ 57,327,592.14 Represents cash held by trustee in bonds Palm Desert RDA Summary of Cash September 30, 2000 Total Cash " 141,002,345.40 Less Cash Restricted for: (1) Bond Funds 123,771,652.34 (2) Debt Service 7,924,777.86 (3) 20%Set-Aside 832,760.70 (4) Housing Authority 4,015,667.94 (5) Trust 4,477,211.57 141,022,070.41 Unrestricted Cash (19,725.01) "' Chart of Restricted Cash El Bond Funds ❑ Debt Service ❑20% Set-Aside O Housing Authority ■Trust ❑ Unrestricted Cash 87% L 0% 6% q%:3 O%10 1% Cash is used to pay for the RDA Annual Budget (t) Balance includes funds for escrow payments, Bond Funded Capital Projects, and payments for Debt Service (2) Funds used for Debt Service Payments and expenditures for projects under contract (3) Funds used for low income purposes(transfer of 20%done at year end) (4) Funds reserved for the Housing Authority purposes (s) Deposit held for Pass-Through Agency Total Cash balance in this schedule is calculated on a cash basis. 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L7 v C C C m D mb m m m d e b V C m m d N (1 C! b N N N Co D O o 0 0 0 0 0 o y d y 0 0 0 0 0 o m m A d o '» ° c O c 3 O 0 a a o 3 D (D :° dr J m b W d e m CD m m O y CCD M S .3i � m 3 � b + d W + f0 W N + N 9 N x T N + N Ol Ili IWy N N q (D J (p A W m + J pO N N Y W 0 d A O N Ol N m N (O W 1D m m 0 N N � •OVi VWi T V� (�� U N F N v 10 N > W p] p (p y < b V N oO N N P W p1 N N O N N g O N A J O C b b N R 6 3 0 a A m 0 0 0 0 0 0 O O O O O O � A O O O O O O W 3 T O O O O O O N l l • � I y o H nm A O m a O S N n d v CITY OF PALM DESERT INVESTMENT ACTIVITY REPORT SEPTEMBER 2000 EXECUTIVE SUMMARY As of 9/30/00, total portfolio book value was approximately$166.3MM. This reflected a net decrease of approximately$12MM from prior month due principally to debt service and a security purchase. There was an unrealized portfolio net gain (market value- book value)of approximately$241 M, based upon prevailing market interest rates. This was only a "paper" gain since there were no premature securities sales. Significant changes in investment position are shown below: "United States Treasury-Coupon". The City buys interest-bearing U.S. Treasury notes with maturities of 2 - 10 years to invest assessment bond proceeds. Although unrated, considered "AAA". THIS ACCOUNT BALANCE DECREASED BY APPROXIMATELY$850M DUE TO A MATURING SECURITY. "Federal Agency -Coupon". The City buys U.S. government agency and instrumentality notes with maturities of 2- 10 years to invest assessment bond proceeds. Agency debt guaranteed by U.S. Treasury; instrumentality debt is not (guarantee, instead, believed to be U.S. Government's "moral obligation"). Although unrated, considered "AAA." THIS ACCOUNT BALANCE INCREASED BY APPROXIMATELY$3M DUE TO AMORTIZATION OF DISCOUNTS. "Local Agency Investment Fund (LAIF)". The City temporarily invests proceeds of matured securities in $13MMM pool managed by State Treasurer's Office for 2,600 governmental entities. LAIF has diversified portfolio (BAs, CP, Treasuries, agencies, corporates, repos, reverse repos, CDs)with weighted average maturity of 180 - 540 days. THIS ACCOUNT BALANCE DID NOT CHANGE. "Federal Agency -Callable". The City purchases federal agency securities that may be called prior to maturity, in order to obtain an additional premium for that risk, thereby increasing overall portfolio profitability. THIS ACCOUNT BALANCE BALANCE DID NOT CHANGE. "City Loan to RDA". The City has made long-term cash advances at LAIF interest rate to RDA for property purchases. Advances will be repaid in future years from tax increment revenue generated by associated redevelopment projects. THIS ACCOUNT BALANCE DID NOT CHANGE. "Federated Govt MMF Pool". The City invests assessment bond proceeds (construction, cost of issuance, and bond reservereserve monies) in "Fidelity Institutional Money Market Fund: Treasury Portfolio- Class I." This $3.9MMM fund investsin U.S. Treasury bills and notes, and repurchase agreements for those securities. Weighted average maturity is 60 days orless. S&P credit quality rating of"AAAm"; Moody's of"Aaa". THIS ACCOUNT BALANCE DECREASED BY APPROXIMATELY$4MM DUE TO DEBT SERVICE. "United States Treasury- Discount". The City buys noninterest-bearing zero coupon securities ("STRIPS")with maturities of 6 months-30 years, to invest assessment bond proceeds. Purchased at discount;face value paid at maturity(difference is yield). Although unrated, considered "AAA". THIS ACCOUNT BALANCE DID NOT CHANGE. "HighMark Sweep Accounts". The City sweeps excess checking balances into "HighMark 100% U.S. Treasury Money Market Fund". This $905MM fund invests only in U.S. Treasury bills, notes, and STRIPS (no repos or reverse repos). Weighted average maturity is 90 days or less (per SEC regs). Although unrated, underlying securities considered "AAA". THIS ACCOUNT BALANCE DECREASED BY APPROXIMATELY$9.7MM DUE TO DEBT SERVICE AND A SECURITY PURCHASE. "State& Local Govt Series -Time". The City buys special noninterest-bearing U.S. Treasury certificates of indebtedness with maturities of 15 days- 1 year,to invest assessment bond proceeds (to comply with IRS yield &arbitrage rebate regs). Nonmarketable. Although unrated, considered "AAA". THIS ACCOUNT BALANCE DID NOT CHANGE. "Medium-Term Notes". The City buys interest-bearing corporate medium-term notes with maturities of five years or less, to invest revenues. THIS ACCOUNT BALANCE INCREASED BYAPPROXIMATELY$2.4MM DUE TO A SECURITY PURCHASE. 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rn N 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 o m a 3 0 0 D D D D D D D D D D D D D D D D D D D D D D D D D D � � D D a d b b N d d d W d d d d d d d d d d d d d d d d d d d d d d d d d d d d M a m O m N I� m m m m m m p m rn m m m rn rn m m m m m m m m m p m m rn m rn rn rn m m m m m m rn n O O 3 � AW m m m m m m C r O IC/1 N N N N N N N D m 9 T J V J J J J M T mN� W W W N N X m a mG)i N U N tW0 tNJ y a m 8 D j < O 0 O0 2 �7 + O m m J m y W J m N W N + = O 3 N + O A W N + O m J $ Y W 9 3 1^ 0 3 m Z o c C T c C C C C C C 6= C C C C CC C r Q 6 T T T T T m T m m m T T T z z z z z z m z z z z z z z m 0 m m m m m m m m m m m m m m H m m m m m m y m m m m m m m 4 O G m m m m m m m m m m m m m m m m m m m m m m m m m m D m m m m m m m m m ti m m m m mm m m m m m D D D D D D Im D ➢ D D D D D ip m O O O O O O O O O O O O O m m m m m m m m m m m m m m m n m Q Q O 0 L) L) 4) L) 4) L) O O O N W m m m m y mmm rn m m < O O <O <O <O <O O O O O O C O C O �An A �An A A �1 At �An A A A �1 A1 �1 At �t A1 D D D D D D ➢ D D D D D D f<II > > > > C C C C C C C C C C C C C m m m T m m T T T T T T T A A A A A A A A A A A A A N m N < < < < < K a < < < < < K K ^1 Z !+ b O z N m A V O m O N V W 10 ff 10 N m V m m 1 O O O O O O O O O O O O O O O O O O O O T J J 13 k k 13 13 N + N �N 13 13 13 t� O O O O O O O C O In a d A A A O N ` N N N N n T1 V J J v S S m m m m m O S O O O O O 0 m CD _O O 3 `D CD m + m + m + L O N m J V a L m f0 9 1 y W N m V W V m m O O S O O O O O J OJ m O m O O O O O O O O W O O m O 3 0 0 0 0 0 0 0 0 0 0 0 o 0 0 0 0 $ $ o 0 0 0 0 o a o 0 m m' J o m $ 0 0 0 0 0 0 o N o o m O A D O Ni 3 O CDr�i Z m m A 1 m N V A N N W W m m T pad N m V mV m N W O A m N N O -` V m O m O O O O O O O O W O O m O O O O O O V W + N + m O m W W m 0 0 0 O O O O O O O A O O C O O O O O O T + W O W + O m m m J O m O O O O O O O O N O O m N N + V J Y co m 09 a a + yy + Q N � tY11 Q m O m N V O 10 m m m V T V Omf V m fT Y V > W V t��I Lmi N V S 0 O Omf O O O O O O O O W O O m S O O S O O m N m + + L A m T T V $ m $ O O O O O O O N O O m m mmmm m m m m mmm m m m m m m m m m m W N N N N m m m O O O O O O m m 0. 0. 0 y mw m O O O O O m N m0 0a O O0 mm0 OOOII OOO1I O O O O O O m 6 O D D D ➢ D D D D D D D D D D D D D D D D D D D D D a m m m m m m m m m m m m m N m m m m m m m m m m m m m a � m m OI a m m m N A O _ + + + + + + + + + + + N O O O O O O {1m1 m m m m N N N T m 01 pm p m p m m m m p m p m p m m m p m p m O O O S O O A N W W W p O m O O m m m m m S S T Ol OI m m Ol Ol W Z� m O 000 p000 W YIm NNN WW NIN OI0000000000000 Nn A fOJ O (O\D m 0 W N m N N O y 0 0 m m A N 1a 0 S N N N N 0 0 0 N N Q C m o 0 0 00 0 0 $ 0 0 0 0 0 0 m m N O O O 0 N N 00 0 0�7 a m > c G� o W u K m O m m m m m to a w 1mm m x u w w Sw A m y o 3 n n o 0 o m m a a x c p o N A 0 S T 4 a 0 m r m m O O J v N O y O O o o 0 O O o O O O A O N N N 0 0 b m J C J T 0 (D N V N W Z y 0 c 3 m Z 2 3 y T a c e y e c a 3 P P P P m O O O O C C C C = c c p m m m m m m O O m 2 Z Z Z Z m Z Z m C a m m o y N N n m m m m m a m m y i z v v o v o v v q m r r r m 0 0 m N N N N N m rn N 'm 'm Z m m 'm > > m ' K K O -c+ m m m m m m ' m m O m m T T OI N N N N N N > 0 0 A 2 A A A �1y A 2 Z N N N 4>i f>/1 f>/1 111 !>/1 m > > m m c c c c c c c i' Z z m U A p A A A D D y N N x x V 9 m < < < < K N K K N N 0 C O bD m m mn O W A b O m N 1 1 N N N 13 N N N N C 0 (O 10 10 t0 (O b [O b O O p m b tb0 b Wb WO W w w O O 0 m ° O doom m = r U V N W N W W RI V M ; (IJ d N N O O N 'O A N CI b A m A O O O J W O O O O O O O O V G 0 3 d rn o S o o a mm o 0000 v 0 0 0 a o c o 00000 0 o a N ID< b o 0 0 o m o rn o 0 0 0 0 0 o O S m OCD � D O = K W V N N !+y W W OI N N m Y W m L N fO N + O O) m N b A b N Ol J J W N m N N O V p (O V G V N fG N N A N f0 N rn W W O J A O J m I V O O O S N O O) O O + + W O O O O m a V N N + 4 W N A N N f0 tp O + M, b N W (O + + N N m '0 'O O1 (p b N N b O] W N IG lJ g W N N f0 O N A 10 O O i0 O1 t(1T� �Ap i0 J + N N 01 J N + l0 F N p1 N OI V P O N + N N OI Y O O O R A N N pN� N A A A A A b N N N A A OrnI Ornf �Np N V m 1i O N 3 O w m m w m w S m m m m m m m m m m m A N O N Co m + T I W m A N J N A O d O^ IN N N N N N N N N N N N N N N O O O 0 T rn m p AIy q U A V 2 N y O O O O O O W $ O N O 10 V O O O b O O O 10 b O O O N n p O O O O o O �p pO� L �mn m �Onl yNr N O O a A rn rJ3 rJ3 N rN3 N i3 1N3 rN3 N p 3 m wwSBw § o m7 N a u C o m w q � 9 Y C m J y y o o O q O O q y W # N 4 S n N N � m N � O O r e m q N c q N = m P m D D a A ti ti n _ = m � n n A m x m z H F � Z � .. C O AO b W A 0 q 0 N Ol q q 1 d O O O 9 s aaa cm 'n T A N N N Q S 'Q y ❑ 3 � o d m C 00 Y/ L 3 " V N H + F 1 N W Y W G W + N (+p b U N f0 A q P 4 � N O + O p A W G N N N b V fJ N + 10 C W m N t0 A q N .a b p A 6 3 a 0 n `c u uO a N + + + = O T I� 3 v. m O 9 O � u A m o D O D v D m REDEVELOPMENT AGENCY INVESTMENT ACTIVITY REPORT SEPTEMBER 2000 EXECUTIVE SUMMARY As of 9/30/00, total portfolio book value was approximately$143.2MM (with SLGS). This reflected a net decrease of $7.8MM from prior month due to debt service and redevelopment pass-throughs to local agencies. There was an unrealized portfolio net gain (market value- book value)of approximately$103M, based upon prevailing market interest rates. This was only a "paper" gain since there was no profit-taking. Significant changes in investment position, by security type, are discussed below: "State& Local Govt Series -Coupon." Palm Desert Financing Authority buys special interest-bearing U.S. Treasury notes with maturities of 2- 10 years to invest proceeds of advance refundings held in escrow(to comply with IRS yield and arbitrage rebate restrictions). Although unrated, considered "AAA". THIS ACCOUNT BALANCE DID NOT CHANGE. "Federated Govt MMF Pool." RDA invests tax-exempt bond proceeds (construction, cost of issuance, and reserve monies) inFidelity Institutional Money Market Fund: Treasury Portfolio- Class I." This $3.9MMM fund invests in U.S. Treasury billsand notes, and repurchase agreements for those securities. Weighted average maturity is 60 days or less. S&P creditquality rating of"AAAm"; Moody's of"Aaa." THIS ACCOUNT BALANCE INCREASED BY APPROXIMA TEL Y $2.6MM DUE TO MATURING SECURITIES. "Local Agency Investment Fund (LAIF)." RDA invests City's loan in $13MMM pool managed by State Treasurer's Office for 2,600 governmental entities. LAIF has diversified portfolio (BAs, CP, Treasuries, agencies, corporates, repos, reverse repos, CDs)with weighted average maturity of 180 -540 days. THIS ACCOUNT BALANCE DECREASED BY APPROXIMATELY$9.2MM DUE TO DEBT SERVICE AND REDEVELOPMENT PASS-THROUGHS. "United States Treasury-Coupon." RDA buys interest-bearing U.S. Treasury notes with maturities of 2- 10 years to invest tax-exempt bond proceeds. Although unrated, considered "AAA". THIS ACCOUNT BALANCE DECREASED BY APPROXIMATELY$1.4MM DUE TO A MATURING SECURITY. "State& Local Govt Series -Time." Palm Desert Financing Authority buys special noninterest-bearing U.S. Treasury certificates of indebtedness with maturities of 15 days- 1 year to invest proceeds of advance refundings held in escrow(to comply with IRS yield and arbitrage rebate restrictions). Nonmarketable. Although unrated, considered "AAA." THIS ACCOUNT BALANCE DID NOT CHANGE. "United States Treasury -Discount" RDA buys noninterest-bearing zero coupon securities ("STRIPS")with maturities of 6 months - 30 years to invest tax-exempt bond proceeds (construction monies). Purchased at discount; face value paid at maturity (difference is yield). Although unrated, considered "AAA". THIS ACCOUNT BALANCE DID NOT CHANGE. "HiahMark Sweep Accounts." RDA sweeps excess checking balances into "HighMark 100% U.S. Treasury Money Market Fund." This$905MM fund invests only in U.S. Treasury bills and notes (no repos or reverse repos). Weighted average maturity is 90 days or less (per SEC regs). Although unrated, underlying securities considered "AAA." THIS ACCOUNT BALANCE INCREASED BY APPROXIMATELY$166M DUE TO INTEREST INCOME. "Federal Agency -Coupon." RDA buys U.S. government agency and instrumentality notes with maturities of 2 - 10 years to invest advance refundings and tax-exempt construction funds. Agency debt guaranteed by U.S. Treasury; instrumentality debt is not(guarantee, instead, believed to be U.S. Government's "moral obligation"). Although unrated, considered "AAA." THIS ACCOUNT BALANCE INCREASED BY APPROXIMATELY$5M DUE TO AMORTIZATION OF DISCOUNTS. "Federal Agency -Callable". The City purchases federal agency securities that may be called prior to maturity, in order to obtain an additional premium for that risk, thereby increasing overall portfolio profitability. THIS ACCOUNT BALANCE INCREASED BYAPPROXIMATELY$2M DUE TO AMORTIZATION OF DISCOUNTS. "Medium-Term Notes". The City buys noninterest-bearing corporate medium-term notes with maturities of five years or less, to invest revenues. THIS ACCOUNT HAS NO CURRENT BALANCE. YIELD(%) P N N W W : K o WWp m K o m m C w C T T N ti W lJ W O A Z DnO eO�BOfnjf/)e T�D � OxmpxmcmmmDmDmDm mmm ZGC �mD xNO �O o Nm <Ov<m«<< OpC) N Tuoo $o N" •� m tDn DN 60000TO 0 . mmo �N Tm b 022 < $ e 0Bf�O�mOM , n m cZ4 m yr fn mm z O oN m D Z m ' m$ m a° O Z (n D Z r m w O O D T N O 'f+- ��' m tJ T P 33� c ` }3.ry ; nW 0 DO ~ �ri i 1 p 8 D ? m O lJ V W Q N A TOW co p n O N V N O a p N (O A 0 = 0 V N N t k r y 5� 8 $ m = r0 � N ON: K `�w �N� 25 � 6 > > = o�o � ' ° N °$w dos s 8 ; o � c o w� Z N z y m o _ _ m y ..� s D �i �iw IVV c�NNNN mvw�>n' m r ((��yyO omWN 10(pN��10 m $ W S J m f J D A A W W O A l J m N IMIUM E Mll 8 eUNN ....wl - n i9 P j O 2° N d1 d1 W fA ip(n fq(A(A fA N c O � 4 V pO(JTT p� + ipO pN� y=y $ Oz WW N A N N W O $8 Z m a T a $ O _ m n <Z< MM V W o T A m$ H m vim ymp m� m 11 YIELD(%) a p a m N W W QQ W A W $ C Z O $MILLIONS o a 2 p _ m O CFWq..F'IY P"Fd�'fCIC'SaY.. "F� Z O a o S o o 8 PORTFOLIO (%) s Z O � >s s ffi s z Z0. w 0 '• O. n 4 O $ N 00 p @@ NQ N T $ T _i $ 1J.wdr kha`ei:...rvL.A.`;t'�'sR'k5 D G C S yZy, m m w O a2 g F m 8 0 mm _ m o m . . . . O Z i S Caa 1st11 p N w Wa c Wm Dsa m ra rma m m W .4 wT CN NN t yyy :. .- m N D O , 8 IS C D N O C D O m m 7 > to 3 m C CD G (D y cu _ cu 3 cn j a. u o H Z CD 0 3 0 CD Cn � o 3 m n N z N T m W N > cn A W C/) 07 01 Cn �. Cn O 0 0 rn- N D D n s -{ g D T T T 7 N N N N O N D (D D A m ao_ Z D m Dc° o00o OCD m m CD o _ (D A CD N e a Cl Q (D W N O ((OD t7 tS C7 Z N b C 7 0 CD A 3 Z w O O N d N N C < C o M. (O C 0ZZ � 0 " A A 0 � N CCDD (D (7 CD � w O 0 (D (D o O .Z1 A ° A A O N 41 C t• A O a N D 0 o $ = o o n m ohm a ° > > o p y� z o � O0' 0 0 -0j0 (Dc O A er ° O wr A W Z - oa0 cn y CD cu N ° ° O ° 3 5 0) N - O o 0 1 0 ° n y ° m p N O 0 N 0 7 ^ O -r M D N ^ � Z 0 m I N m v m m 3 O O O b. O O O O >O A Z 1 m 0 -n Z1 m N Z O O 6H V) EA fH En 64 EA V) 69 Vq 69 (n 60 y D N C)i U1 W W (11 0 O W ((00 W W co C -n > AO (T Ot O D0 Gt D) -I co to > r _O Ow (D w r w > y r r r A W O r r r CA CA N 0 0 0 m cmn Cl) vm) cmn cmn a) cmn (n a) cmn r, 2 D Z m m ■ n n � � k B _ z 2 § ) # [ \ m ! / � g (Az m E x CD 0 D > �\\\ �\ o > VT 0 CD cD -n - -n0c \ AK \ ^ « BCD }CD \ (j0 0) a - - k + " k [ . ;a- J / } \ \ \ / \ + q -4 w tea ƒ ( § _& y ) { g ; \ f7A � / \ » q / ) /\co ) ( o ;k k } \ e-6 7 5 � \ \ \ { \ \ 0 CD 0CD � �7/ \ \ j ( CD CD > 9 E � CD 2 % © « } ( ; 7 f ao G S § CD ƒ 7 a E ( f2 § i = _ r- , _ , z m co m0 ca ca m ] m $ 7 7 § [ 2 \ - - > o\ > 0 4 ) , , � § « * « « « x § _ m m mmmG > z 0 A` Hattionwide• CITY OF PALM DESERT Retirement Solutions 1 Deferred-.Compensation Program (457) a Netiormds F,.e ICompmr v.i -. _ _, ;;:h. fate irient;d'Account Ilrlrrrrlrlrrl11111rr11„rtrlrlrlri1t11r111trlrlrrllirrrrlrril PAUL GIBSON Page: 1 of 3 FINANCE DIRECTOR Entity: 0516 73510 FRED WARING DR PALM DESERT CA 92260-2524 1'aur-Account Value i4s=C}f June 3(), 2{iQ0 $2,478,226.67 Maur Total I?e(erralsiT ansfers In TO Bate = - $1,972,218.86 YOur Total 1Nlthdrawatsl-Tv ndlers f ut Ta Date: - $459,479.91 Your TotalhargeslC. TO lilts T _Dae $506.00 1'aur Vital Ga1nlLoss Up Date $965,993.72 The amount shown above in Total Charges/Credits To Date is the total amount of charges or credits since you have joined the plan. Report Period: April 01, 2000 Thru June 30, 2000 Your 457;Deferred;Compensation Plan AcceU 1 Vafues By Fund.Atre !F 03/31/2000 Deferrals/ Withdrawals/ Charges/ O6/30/2000 o Fund Name Value Transfers Exchanges Transfers Credits GaINLOss Value 0 ' Life Des Aggressive Port 809.35 0.00 000 0.00 0,00 -32,42 776.93 Bond Fnd of America, Inc. 14,542.97 279.93 0.00 0.00 0.00 80.40 14,903.30 Brwn Cap Mgmt Smi Co Fnd 0.00 139,00 0,00 0,00 0.00 14.71 153.71 Drey Appreciation Fnd Inc 10.30 230,00 0.00 0.00 0,00 3.90 244.20 Drey Prem Mdcapstk Cis A 406.29 0.00 0.00 0,00 0.00 - 12.45 393.81 Drey S&P 500 Index Fund 49,085.14 5,308,611 0.00 - 198.10 0.00 -1,471.64 52,724.06 i-. Drey Prm3rdcnt Fnd Cis Z 26,989.34 762.42 0.00 0,00 0.00 -119.74 27,632.02 Fid Asset Manager 7.486.29 430.71 0.00 0.00 0.00 -50,84 7,866.16 Fid Contraiund 119,844.79 10,023.58 0.00 - 1.279.32 0.00 -8,064AB 119,524.17 Fid Equity Income Fnd 62,114.12 1,177.35 -374.56 -741.20 0.00 -202.68 61.973.03 o Fed US G'tsc Fnd 2-5 Vs Is 7,412.17 0.00 0.00 0.00 0A0 115,74 7,527.01 Nationwide Fixed Account 1.377,358,79 20.191.43 0.00 - 13,538.23 0.00 18.669.98 1.402,681.97 Fid Magellan Fnd 100,474A2 4.649.65 0.00 - 139.44 0.00 -4,158.33 100.826.30 Grwth Fnd of America, Inc. 17,164.04 730.50 307.44 0,00 0.00 -244.42 17.958.36 eeeeeee, Invesco Dynamics Fnd 22,700.31 4,012.86 250.27 0.00 0.00 -342.19 26,621.25 CUSTOMER SERVICE (877)677-3678 (ESPANOL) (800)649-9494 TOD: (800)848-0833 Web Site: WWW.NRSRETIRE.COM If you have any questions or concerns about your account, please call the Customer Service number, or write to the following address: NATIONWIDE RETIREMENT SOLUTIONS PO BOX 16766 COLUMBUS OH 43216-6766 ` - ` Report Period: April n1. %V001hru Jun. A. 2U8n Page: 3cf3 � , Entity: 0516 Investments Under This Plan Include: (1) Nationwide Life Group Fixed Fund Retirement Contract, Or (2)The Fund Options Within The Nationwide Life Group Flexible Fund Retirement Contract. The 3rd quarter effective interest yield for deposits received after 06/30/2000 into the Nationwide fixed return option in6.5V%. The 3rd quarter effective interest yield for deposits prior 1n6/J0/200V into the Nationwide fixed return option is 5.60%. The 2000 guaranteed minimum effective interest yield is 5.25%. � | | B � ~ - P1706111 I159 M Quarterly Financial Report for A 457 peferred Compensation Plan ICMA RETIREMENT CORPORATION 04/01/2000 through 06/30/2000 Page 1 of 3 , 'J(R1n PAUL S GIBSON With the introduction of the Enrollment feature on EZ Link, CITY OF PALM DESERT enrolling participants has never been easier!Contact 73 S 10 WAR I NG DRIVE ICMA-RC'sEmployers Services Unit atl-800-326-7272tosign PALM DESSERTERT C CA A 92260-2564 up for EZ Link or to add this new feature. Plan summary Information for the Period Fading /30/Zw a ram rcw ..,,.,.da� ... a ,.�,�! . ..a�,�..«,u ,., _ ,.,, 021 ;. Fund Balance on 04/01/2000 $2.968,94Ot1,. Plan No: 302129 Contributions tl-84ZB8 Roll-ins 4555.53 Distributions 76:S39.19 Earnings 48,08290 Service Fees z: b 11 Fund Balance on 06/30/2000 x $2960,70492 Total Plan Assets $2,960,704.92 ,sutmnary by Fund Aggtesstve xi0wetaeas "` 'Cd'owth Cuowth OPP� aa.-..InternaHonlal„...,x.` 4LY..Lide __..., Balance on 04/01/2000 $31,477.88 $42,076.68 $1,919.19 $1,421,893.98 $0.00 Contributions 861.56 1,740.27 0.00 4,333.56 75.00 Roll-ins 0.00 244.57 0.00 0.00 292.51 Distributions 0.00 0.00 0.00 1,787.50- 0.00 Earnings 1,099.11- 1,299.53- 80.59- 46,884.97- 1.15- Service Fees 0.00 0.00 0.00 0.00 0.00 Balance on 06/30/2000 $31,240.33 $42,761.99 $1,838.60 $1,377,555.07 $366.36 Percentage Invested 1% 2% Less than 1% 47% Less than 1% Snotmary by Fund cons Broad MaP&et x;x �500 stoc& Fgaity `11 reset core Bond a? ..:Y .. j111COmC .:....a .. PII. ..».... .. ,..k...''. Balance on 04/01/2000 $117,884.95 $6,259.02 $210.17 $164,930.82 $16,274.96 Contributions 2,153.76 1,583.47 154.80 672.00 685.75 Roll-ins 0.00 0.00 0.00 0.00 292.50 Distributions 0.00 0.00 0.00 4,183.27- 15.48- Earnings 5,156.02- 189.09- 4.38- 1,465.05- 179.65 Service Fees 0.00 3.47- 0.00 0.00 1.36- Balance on 06/30/2000 $114,882.69 $7,649.93 $360.59 $159,954.50 $17,416.02 Percentage Invested 4% Less than 1% Less than 1% 5% 1% Summary by Fund cunt PLUS Savings Consvvative, TrAdh1a4i l ' �Long Term Balance on 04/01/2000 $689,928.89 $345,003.56 $31,545.85 $3,096.49 $39,034.50 Contributions 8,589.45 7,553.86 1,801.10 1,402.38 3,713.83 Roll-ins 292.50 0.00 0.00 0.00 0.00 Distributions 552.94- 0.00 0.00 0.00 0.00 Earnings 9,180.42 3,140.72 87.79 11.97- 868.29- Service Fees 1.36- 0.00 0.00 0.00 0.00 Balance on 0613012000 $707,436.96 $355,698.14 $33,434.74 $4,486.90 $41,880.04 Percentage Invested 24% 12% 1% Less than 1% 1% Please reulete your statement carefuIIy. lfyou suspect an error,you must notify RC at 1-800-32&7272 within 120 days after the end of the quarter in which it occurred. Fagure to do so will prmimt RCfrom adjusting your account. =0002-3210 • vvw,.v.lc;re-_ - ti 67 I1 1251 Quarterly Financial Report for nfl A 457 Deferred Compensation Plan ICMA RETIREMENT CORPORATION 04/01/2000 through 06/30/2000 page 3 of 3 ilfan't Cr1Y OP PAiM 171ffiERT k°' . Steam Value ;dates on 04/6112000 P ares on'db%30/200tf t�ntlttneti z : 4 ,!Shares Patric of X r 8 Shares Yatrie of Asset Allocation 6,578.8118 25.07,One Shale ..., (3ivned"` 4ne Share,'„ 6,436.8009 24.85 Core Bond Index 1,184.4958 13.74 1,254.7562 13.88 Savings Oriented 22,475.8019 15.35 22,963.0826 15.49 Conservative Growth 2,069.9373 15.24 2,188.1372 15.28 Traditional Growth 179.6110 17.24 261.9322 17.13 Long-Term Growth 1,967.4647 19.84 2,163.2257 19.36 M.S. Momtm Growth 997.4952 27.49 1,060.9182 24.61 M.S. Aggr Growth 89.1023 37.03 147.1555 33.81 M.S. Foreign 90.5407 14.91 180.4026 14.12 M.S. Capital Apprec 450.8251 23.73 542.2316 22.75 M.S. Lrg Co. Growth 56.5635 19.68 106.3452 18.60 M.S. Growth 28.7149 28.28 46.0244 27.64 M.S. Contra Growth 8.1842 25.09 17.7525 23.40 M.S. Grwth 8 Inc 342.7542 24.98 394.4267 24.99 M.S. Sp Situation 160.4619 24.58 171.5289 24.79 COt1tTt11UNOn I76tingxm w� `� °- � ` Date 04/04/2000 04/18/2000 05/01/2000 05/16/2000 05/31/2000 0613/2000 Total $5,003.53 $5,436.52 $5,436.52 $5,491.52 $5,491.52 $5.491.52 Date 06/27/2000 Total $9,491.55 Total Contributions this Period $41,s42.68 STATE OF CALIFORNIA PHILIP ANGELIDES, Treasurer OFFICE OF THE TREASURER SACRAMENTO --` Local Agency Investment Fund - - PO Box 942809 Sacramento, CA 94209-0001 (916) 653-3001 August, 2000 Statement PALM DESERT REDEVELOPMENT AGENCY Account Number : 65-33-015 Ann: TREASURER -3-SIO PRED WARIIJG DRIVE PALSIDESERT CA 92260 Account Summary Total Deposit : 0.00 Beginning Balance : 26,549,807.36 Total Withdr.m al : 0.00 Ending Balance : 26,549,807.36 Page : 1 of 1 STATE OF CALIFORNIA PHILIP ANGELIDES, Treasurer OFFICE OF THE TREASURER SACRAMENTO Local Agency Investment Fund i= PO Box 942809 Sacramento, CA 94209-0001 t (916) 653-3001 August,2000 Statement CITY OF PALM DESERT Account Number : 98-33-621 Attn: CITY TREASURER 73510 FRED WARNG DRIVE PALM DESERT CA 92260 Transactions Effective Transaction Tran Confirm Authorized Amount Date Date Type Number Caller 08-25-2000 08-25-2000 RW 632635 THOMAS JEFFREY - 10,000,000.00 Account Summary Total Deposit : 0.00 Beginning Balance : 29,296,173.55 Total Withdrawal : 10,000,000.00 Ending Balance : 19,296,173.55 Page : 1 of 1 3 �a- a o W R C K ,Q �" N ^•F O, 9 N 1� 7 �O h vt //\ 1. O•:-r l� M .-�'. 7 �D O�=Ry... G1 h �n v1 �O O N O� R V/ CN O W W Q h W M 0 0 7 0 � N ,00000 ,00�v' O o -- - d .- o vi o •o � z a Uj 0. J W v'Y F �yif1 Q � ""F 'i' C, ^ H vl m O o0 F A LL Q cc a O Z LL � � R O .� 01 d _..-N vl (`]-'O R N vi a0 M Q\ O ap O U � A �F2 d O:"O M O� iOrvTtrl� � ao: W 7 M .•. M O B c p O'O O O'i0� ;do DY Qn w O O O O O O O ti d M [ rn it, o„cam �. rn o d o 0 0 0 0 0 o u G a c ice• � N ^ M PC O T73 go ao ro a a U — O F Li. KOLLER OF CALIFORNIA ___ ,0• 30X 942850. SACRAMENTO♦ CALIFORNIA 94250 THIS REMITTANCE ADVICE IS FOR INFORMATION PURPOSE ONLY. THE WARRANT COVERING THE AMOUNT SHOWN GILL., '': '. BE DEPOSITED IN THE UNION HANK CITY TREASURER CITY OF PALM DESERT 73-510 FRED HARING DRIVE PAL" DESERT CA 92260 HA?RANT NUMBER 69890314 ISSUE DATE 09/22/2CJ TOTAL REMITTED 1.068t179.32 :) AYF= CITY TREASURER PAYEE I .D•33058 °UND 4A71E RETAIL SALES TAX STATE OF CALIFORNIA — BOARD OF EQUALIZATION STATEMENT OF 1% LOCAL TAX DISTRIBUTION 3305'9 DATE: 09/13/2000 FOR THE PERIODS SHOWN BELOW PAYEE: CITY TREASURER CITY OF PALM DESERT NET COLLECTIONS 05/12-08/11 3924gr336.72 ANT DUE COUNTY (CITY ?ATE 100.00Y) 0. 00 Af"T DUE IN—LIEU 0. 00 TOTAL DUE 05/12-08/11 392439336.72 PRIOR CREDITS 0. 00 PRIOR ADVANCES 05/12-08/11 2,827,000.0C— COST IF ADMIN 27v157. 40— BALANCE N�___ -- 05/12-08/11 394t179. 32 CURRENT ADVANCE 08/12-09/14 674v000. 00 TOTAL PAYMENT 190689179. 32 �r✓q[1 /�r�n � LRJ/ ytr✓ F 337 3 oy/, yS3 ra S�i UO PALM DESERT REDEVELOPMENT AGENCY COMBINED STATEMENT REVENUE AND EXPENDITURES COMPARED TO BUDGET 30-Sep-00 TOTAL RDA RDA RDA % ACTUAL (FAV) UNFAV BUDGET YTD BUDGET ACTUAL TO YTD BUDGET VARIANCE REVENUES 1 Tax increment 33,964,500.00 8,491,125.00 574,863.25 7% 7,916,261.75 2 Interest 1,342,380.00 335,595.00 144,619.17 43% 190,975.83 Sales of Property - - 0% - 3 Reimbursement From Other Agencies 1,015,000.00 253,750.00 227,948.03 90% 25,801.97 Other Revenue - - 15,707.67 0% (15,707.67) Transfers to/from other funds - - - 0% - TOTAL REVENUES 36,321,880.00 9,080,470.00 963,138.12 8,117,331.88 FAV(UNFAV) EXPENDITURES Administrative Costs 820,200.00 205,050.00 125,333.58 61% 79,716.42 Professional Services 876,477.50 219,119.38 274,150.89 125% (55,031.52) 6 Property Tax Administrative Fee 546,000.00 136,500.00 - - 0% 136,500.00 Cost of Inventory Sold - - - 0% - Payments to Other Governmental Agencies 11,612,795.00 2,903,198.75 - 0% 2,903,198.75 Bond Issuance Costs - - - 0% - Bond Discount - - - 0% Interest And Fiscal Charges 9,520,213.00 2,380,053.25 2,808,191.67 118% (428,138.42) Principal Payments 3,030,000.00 757,500.00 365,000.00 48% 392,500.00 - - 0% - Capital Outlay - - - 0% - Office Equipment 10,000.00 2,500.00 - 0% 2,500.00 Undergrounding Projects 27,827.00 6,956.75 15,776.52 227% (8,819.77) Deep Canyon&Hwy 111 - - - 0% - El Paseo Improvements 4,250,000.00 1,062,500.00 - 0% 1,062,500.00 Parking Spaces 500,000.00 125,000.00 - 0% 125,000.00 Fred Waring Dr.Street Improvements 2,148,532.00 537,133.00 110.51 0% 537,022.49 1-10 Cook St Interchange 250,000.00 250,000.00 250,000.00 100% - No.Sphere Infrastructure 1,184,058.00 296,014.50 331.04 0% 295,683.46 RDA Projects 3,313,582.00 828,395.50 - 0% 828,395.50 Desert Willow 107,170.00 26,792.50 300.00 1% 26,492.50 Land Purchases/Property Acquisition 4,557,000.00 1,139,250.00 13,926.03 1°/ 1,125,323.97 Business Enhancement Loan Programs 1,000,000.00 250,000.00 - 0% 250,000.00 Regional Park#4 5,000,000.00 1,250,000.00 - 0% 1,250,000.00 - 0% Transfers - - - 0% - Transfer Out Administrative Costs - - - 0% - Transfer(In)/Out Capital Exp Reimb (920,000.00) (230,000.00) - 0% (230,000.00) Transfer Out Low/Mod Set-Aside 6,680,700.00 1,670,175.00 - 0% 1,670,175.00 - 0% TOTAL EXPENDITURES 54,514,554.50 13,816,138.63 3,853,120.24 9,963,018.39 1. Tax increment is received in Jan&May 2. Interest is received as securities mature 3. Reimbursements are posted at various times during the year. 4. 5. 6. Administrative fee taken once a year a o O o n O m m N O 0 O O N O O O M O d O O m O O O O O O O 0 0 O mOo � o o Cn nOo oo (n o O o c; o o o oo o O o o o o O o d o 0 o M r o N m rn o 0 0 o m o 0 0 0 0 M o o m o 0 0 0 0 0 0 o n m m o rn o an d n o m o N N (o rnn M nn r mom mrn �n n«° r d iri of m ui o G m m Z OR m LL m N t2 U w O a o m m m o m m Qm m N umi o m FL a ¢ Q U m n o o d o d o m ro M o O M 4 ti N T N n O M O m c N m m y n cD � V7 o a ¢ m m U UN o o n U m m W M O N N m m d d an d n O O N .o ro n L o o C ui a ¢ N � N y r O O O O O O O O O O 0 0 0 0 0 0 0 0 0 0 O O U 0 0 0 0 0 O 00 O O 0 0 0 0 0 0 0 0 0 0 O 0 0 0 0 0 O O l� O r 06 N O W N O 0 0 0 0 O Z 0 m O m O n ON O O m O N l0 n 0 0 0 O d a m O m Nd O W 00N00Lq�- 0 C O m w N N 0 Q n 0�- On 00m0 mnt�00 O 0 7 d m n NCO N BOO ^ � � 0 �000 N W O) O) e N .-ri v ui N Z 9 W a M C C 0 O w m m 0 O J v m E y M W W c > c m E W 07 4 m a < o o ¢ m W c `m m U � « Ea me 0x w > O of .mvi w 7 E 7 p O Hd a C n > m �W 0 - 0 7 a a cacYm w a 3 x L o E o N o m o m " - w E ay Irm OHO> c9 aU o c m am U a0 y ¢ cma ` Om5 d m O O w _ zOOz mmmt S Ir m m F o � a ¢ a a U GQ~ a ¢ w U F CO \ co 2 ! ) ° ° N cm , \ k G 5 ; § , ~ w LO co co a 2 < ' - / § k �LU - co 7 {k> - , - - § £ IL # / , , , _ . � | � � . � 7 o 2 - ° -k§ - - ( § a � \� } _ \ k0 - - ® , , ° n ( \ E ) � E - \ �kAS /f (� f ))){X/ 2 §) \/ \ f }E « 2 | � 0M \k \ # ) fkSf a ( ) /A k ; « te - iZ( §k I § IL O =O |# k � kE 0 w � f\;) ) - ƒ / I (nl0F �7l (LILMm = � ) } / $ i PALM DESERT REDEVELOPMENT AGENCY 30-Sep-00 Schedule of Revenue and Expenditures HOUSING FUND 3 YTD (FAV)UNFAV Budget Budget Actual': YTD Variance REVENUES 2 Transfer in of 20%Set-Aside 8,714,700.00i1 1,677,925.00 1,677,925.00 3lnterest 15,000.00 3,750.00 1,219.02 2,530.98 Rental Income $,000.00 ' 14,000.00 7,874.95 i 6,125.05 Sales of Property 165,000.00 (165,000.00) 1 Reimbursement From Other Agencies 2 Housing Mitigation Fees Other Revenue 9,819.48 1 9,819.48 TOTAL REVENUES 6,7t32,700A0 i 1,695,675.00 183,913.45 1,511,761.55 EXPENDITURES FAV UNFAV Administrative Costs 3,901,385.00' 975,346.25 64,654.72. 910,691.53 Professional Services 293,305.00 I 73,326.25 2,457.00 a 70,869.25 Property Tax Administrative Fee Cost of Inventory Sold 6 Interest And Fiscal Charges 1,317,391.97 : (1,317,391.97) 6 Principal Payments 915,000.00 (915,000.00) Office Equipment 5,000.00 1,250.00 1,250.00 Acquisition Rehab/Resale#7 9A8,933.00 237,233.25 642.07 236,591.18 Home Improvement Program 1-6 392,691.00 i 98,172.75 344.70 97,828.05 I Santa Rosa W3,462.00 125,865.50 125,865.50 4 Property Purchases 634.10 (634.10) 5 Desert Rose 9327J00 ' 23,319.75 98,848.14 i (75,528.39) Portola Palms Mobilehome Park 74,385.00 18,596.25 88,069.58 (69,473.33) Housing Development 2,000,0W.00 i 500,000.00 500,000.00 Transfers Transfer (In)/Out Administrative Costs Transfer (In)/Out Capital Exp Reimb TOTAL EXPENDITURES 8,22,44fk00 2,053,110,00 2,488,042'.28 (434,93228)' Notes: 1 Includes prior year adjustment for tax increment calculation change 2 This transfer is done once a year only. 3 Interest is posted with investment maturities or dividend payments 4 Purchase of Rental property on Santa Rosa 5 Includes re-purchases and re-sales 6 Debt Service is due 10/1 and 4/1 of each year ;. City of Palm Desert Parkview Office Complex September-00 September-00 It % YTD YTD # � ce Variance Budget t Actual Variance Variance Budget Actual Varian 8 8 Revenues Rental $ 63,000 $ 66,674 $ 3,674 10583% $ 189,000 $ 199,631 $ 10,631 105.63% Dividends/Interest $ 2,500 $ 7,372 $ 4,872 29489% r $ 7,500 $ 21,253 $ 13,753 283.35% Total Revenues $ 65,500 $ 74,046 $ 8,546 113.05%lt ) $ 196500 $ 220,885 $ 24,385 112A1% Expenses Professional-Acanutung h Auditing 5 5,800 $ 6,371 $ (571) 109.85% ;�a', $ 17,400 $ 19,113 $ (1,713) 109,85% Professional-CUn]llltanlf $ 6,500 $ 6,815 $ (315) 104.85% $ 19,500 $ 18,467 $ 1,033 94.70% Tenant Improccmerm $ 2,500 $ 18,240 $ (15,740) 729.60% _ $ 7,500 $ 20,400 $ (12,900) 272.00% Repairs&6lainten.mn Building $ 9,100 $ 5,275 $ 3,825 5797% $ 27,300 $ 23,698 $ 3,602 86.81% Repairs&Maintenam, -Ltndscapi 5 2,300 $ - $ Z300 000% $ 6,900 $ - $ 6,900 0.00% Utilities-Water 5 250 $ 112 $ 138 44.94% $ 750 $ 210 $ 540 28.03% Utilities-Gas/Electric $ 5,500 $ 8,377 $ (2,877) 152.32% : - $ 16,500 $ 16,081 $ 419 97.46% Utilities-Trash 5 450 $ 633 $ (183) 140.72% _ $ 1,350 $ 1,900 $ (550) 140.72% Telephone 5 150 $ 150 $ (0) 100.12% $ 450 $ 420 $ 30 93.24% Insurance $ 521 $ - $ 521 000% $ 1,561 $ - $ 1,561 0.00% Total Expenses 5 33,071 $ 45,974 $ (12,903) 139.02%( _. -.,j $ 99,211 $ 100,288 $ (1,077) 301.090/,, Operating Income $ „ _ 32,429 .$' 28,072 S (4,35n 86,W19 $ 97,289 $ 120596 $ 23;307,. ; 123.96"J Equipment Rep lacement Eisen e $ 9,639 $ 9,639 $ - 100.00% $ 28,917 $ 28,917 $ - 100.00% °Net Income $ _22,790,$+ 18,433 $. (4,357) - 8U.88% $ 88372' $', -91,679, $ .-M307;, 13409/0( . Note:Tenant impr, in-tits ter the month of September exceeded the budget by$15,740,causing the the net income for!i:•.�nvmth In fall short of the budget.However,this is only a timing difference and will correct it,, li I, the end of the rear. Additionally,the year to date net income exceeds the budget by$23,307. Incesp'_OOlincest - Parkview Office Complex Vacancy Rate Schedule by Suite September 2000 Suite Square No. Tenant Feet 73-710 Fred Waring Drive-Two (2) Story Building 100 Hanover (Extended lease for 1 year beg.1/1/01) 2,560 102 Bergren 1,360 103 Multiple Sclerosis 488 104 Arthritis Foundation 960 106 JMS Consulting 928 108 Senator Kelly(Lease determined by election results) 785 112 Assemblyman Battin(Lease determined by election res 1,406 114 Chamber of Commerce 1,478 118 Goodwill Industries 1,250 119 City/CVAG Conference Room 1,380 120 Golf Dimensions 1,750 200 CVAG 4,292 200A University of California Riverside 841 201 City Storage 604 203 Accounting Services 480 205 Coachella Valley Economic Partnership 700 208 Desert Springs Investments 960 210 Wilson,Peseta&Pichardo 3,040 211 Alzheimer's Association 937 217 Mcmillan 775 Invest Vacancy Report F Parkview Office Complex Vacancy Rate Schedule by Suite September 2000 Suite Square No. Tenant Feet 220 CA. State Dept. of Agriculture 1,607 Sr ( Agreed to a Five Year Lease Extension) ___ WMA Securities 2,981 Total square footage(2 story Building) 31,562 Vacancy Rate-604/31,562= 1.91% 73-720 Fred Waring Drive-One Story Building 100 State of California-Water Resources 15,233 102 State of California-Rehabilitation Department 4,396 Total Square Footage 19,629 Vacancy Rate-0.00% 0.00% Overall Vacancy Rate for Both Buildings: Vacancy Rate-604/51,191 1.18% Occupancy Rate-50,587/51,191 98.82% Note: Parks iew Office Complex is 100%occupied in terms of available space. Suite 106 is used as storage for the City of Palm Desert. InvestVacancc Report Memorandum To: Carlos Ortega n / From: Gregg Lindquist CC: GolfComrnittee Date: October 2, 2000 Re: EOM Report for Desert Willow Golf Resort—September 2000 The following is a prel mikuy operations for the month of September 2000 at the Desert Willow Golf Resort. It has not been not finalized as of this date because there are final journal entries still being made as well as payroll accruals and bank reconciliations. The final report will be submitted at the next Golf Committee meeting. ROUNDS ANALYSIS Desert Willow finished the month of September with a total of 4510 rounds of golf. This fell short of projections by 290 rounds(6%)as we averaged 145 players per day (Budget was 155/day). Our non-resident rates for September were$90 on weekends and$70 on weekdays. Resident rates increased to $45 from the summer rate of$35 on weekdays and weekends. The percentage of non-resident play was 80%. We had 3623 rounds in September 1998 and 4400 rounds in September 1999. Group rounds were 24%of the total volume(1015 rounds). This was a 57% increase in group revenues over the previous year($60,556 vs. $38,540). REVENUES Green fees and golf car fees totaled$217,288 for the month which was 18% behind projections(Budget- $265,741). The average rate per round was$48.18 compared to a budget of$55.36 per round We anticipated doing more dollar volume in the new clubhouse however the large number of discounted rounds from Club Intrawest pulled the average dollars per round down firrther than first thought. 1 i L October 18, 2000 Retail Sales in the golf shop were$46,658 vs. budget of$43,200(ahead by 8%). This equated to $10.35 per round versus a budget of$9.00 per round. Once again we had an outside service perform the actual count and the variance was only over by S400 from the previous month Golf Academy activity was limited because of the renovations taking place in the buildings as well as the range which was being overseeded. As stated in the previous memo, the capital improvements in the building are complete and the area will re-open in mid-October from overseeding. EXPENSES Overall expenses appear to under budget according to the preliminary supporting schedules. There are a few un-posted invoices which will modify that figure but we expect to be under budget for the month PAYROLL Payroll for Golf Operations was running under budget for the month of September. F& B was tracking very close to budget at the month end report, so we project these figures to be in line with the corresponding revenue picture in this department. FOOD AND BEVERAGE The restaurant revenues performed below projections. Combined sales were over $66,884 which was 71%of budget. Preliminary cost of goods sold figures from EOM inventory appear to be 36%which is 4%higher than budgeted. The volume of non-golf related income with outside lunches and banquets continues to bring in higher than expected revenues however, overall sales in this department were below budget. Currently we are trending to do 35%of our total restaurant business in non-golf related revenue. The success of this department will hinge on the banquet and group business in the upcoming season, something that the summer season lacks. On a positive note, we have pre-booked a substantial amount of banquet and wedding business for the upcoming season SUMMARY Summarizing the month of September,Desert Willow Golf Resort performed below expectations with the exception of the retail department. We expect this to reverse based on the amount of group business in Otober and continuing into the peak season Expense controls also in place as well as labor controls which are critical to property performance according to budget. 2 City of Palm Desert Internal Correspondence Date: 9 October 2000 Subject: Legislation to Eliminate Duplicate Government Code Sections From: Thomas W. Jeffrey, Investment Manager To: Members of the Finance Committee Recommendation That the City of Palm Desert sponsor legislation to eliminate duplicate California Government Code sections on authorized investment instruments. Background The City Treasury staff is responsible for annually reviewing the City's "Statement of Investment Policy" and ensuring that it is in compliance with the provisions of the California Government Code. Our ability to do this, however, is increasingly being compromised by internal contradictions within the Code. These internal contradictions arise from poor legislative drafting that has spawned several duplicate Code sections which have been inconsistently amended. For example, a laundry list of 14 authorized investment instruments for cities may be found in Code Sections 53601 (investments) and 53635 (bank deposits). This duplication could have been avoided by incorporating by reference the investment instruments authorized in Section 53601 into Section 53635. Otherwise, a risk exists that future legislation will defectively amend only one of the two Code sections, thereby creating a conflict in public policy. This has indeed already happened on at least three occasions. Example 7. Section 53601 (1) authorizes local agencies to invest in instruments that are authorized in trust indentures, even if they are not authorized in the California Government Code. This is no such authorization in Section 53635 (1), which is supposed to be a duplicate of Section 53601 (1). Example 2. Section 53635 (h) authorizes local agencies to buy CDs from credit unions. This is no such authorization in Section 53601 (h), which is supposed to be a duplicate of Section 53635 (h). Legislation to Eliminate Duplicate Government Code Sections 9 October 2000 Page 2 of 7 Example 3. Section 53635 (h) prohibits local agencies from buying CDs from a credit union if a local agency official sits on the credit union's board of directors or on a board committee. This is no such prohibition in Section 53601 (h), which is supposed to be a duplicate of Section 53635 (h). It is conceivable that an inexperienced local agency official could innocently reference 53601 (h) for guidance act upon it and violate the law. The solution to the problem is simple. Code Sections 53601 (investments), 53601 .5 (qualified purchase agents), and 53635.6 (prohibited investments) should be incorporated by reference into Section 53635 (see Exhibit "A")• A brief analysis that highlights the proposed changes is attached (see Exhibit "B"). Conversely, the duplicative and unnecessary Code sections of 53635 (a)-(m) (investments), 53635.5 (qualified purchase agents), and 53631 .5 (prohibited investments) should be deleted (see Exhibit "C")• The California Municipal Treasurers's Association has voted to support the City of Palm Desert should it elect to sponsor such legislation. This means that the City may use the services of the League of Cities lobbyist to promote this clean-up legislation. The proposed legislation would not contain any substantive changes to the Government Code and, consequently, should not be controversial. Fiscal Impact None. cc: Paul S. Gibson, City Treasurer Attachments: 1 ) Exhibit "A" (2) Exhibit "B" (3) Exhibit "C" Legislation to Eliminate Duplicate Government Code Sections 9 October 2000 Page 3 of 7 EXHIBIT "A" PROPOSED AMENDMENTS An act to amend Sections 53601 , 53601 .5, 53601 .6, 53631 .5, 53635, and 53635.5 of the California Government Code, relating to local agency investments and deposits. (Additions indicated by italics; deletions by stftker) ARTICLE 1 — INVESTMENT OF SURPLUS Section 53601 . Authorized investments; eifetiffistanees h) Negotiable certificates of deposits deposit issued by a nationally or state- chartered bank, a state OF fedeFal assoeiation savings association or a federal association (as defined by Section 5102 of the Financial Code), a state or federal credit union, or by a state-licensed branch of a foreign bank. Purchases of negotiable certificates of deposit may not exceed 30 percent of the agency's surplus money which may be invested pursuant to this section. For purposes of this section, negotiable certificates of deposits deposit do not come within Article 2 (commencing with Section 53630) of Chapter 4 of Part 1 of Division 2 of Title 5, except that the amount so invested shall be subject to the limitations of Section 53638. The legislative body of a local agency and the treasurer or other official of the local agency having legal custody of the money are prohibited from investing local agency funds, or funds in the custody of the local agency, in negotiable certificates of deposit issued by a state or federal credit union if a member of the legislative body of the local agency, or an employee of the administrative officer, manager's office, budget office, auditor-controllers office, or treasurer's office of the local agency also serves on the board of directors, or any committee appointed by the board of directors, or the credit committee or the supervisory committee of the state or federal credit union issuing the negotiable certificates of deposit. r, Legislation to Eliminate Duplicate Government Code Sections 9 October 2000 Page 4 of 7 Section 53601 .5. Investments; qualified purchase agent. The purchase by a local agency of any investment authorized pursuant to Section 53601 or 53601 .1 , not purchased directly from the issuer, shall be purchased either from an institution licensed by the state as a broker-dealer as defined in Section 25004 of the Corporations Code, or from a member of a federal of state esseeiatten savings association or federal association (as defined by Section 5102 of the Financial Code) or from a brokerage firm designated as a primary government dealer by the Federal Reserve bank. Section 53601 .6. Prohibited investments (a) A local agency shall not invest any funds purstiant to this Wtiele in inverse floaters, range notes, or fnoftgage derived interest-only strips that are derived from a pool of mortgages. (b) A local agency shall not invest any funds pUfftaRt tO thiS fftiCle in any security that could result in zero interest accrual if held to maturity. However, a local agency may hold prohibited instruments until their maturity dates. The limitation in this subdivision shall not apply to local agency investments in shares of beneficial interest issued by diversified management companies registered under the Investment Company Act of 1940 (15 U.S.C. Sec. 80a-1 , and following) that are authorized for investment pursuant to subdivision (k) of Section 53601 . ARTICLE 2 — DEPOSIT OF FUNDS Section 536-31 .6. Pfahobited investments A lc)eal agency shall not any funds PUFSI:18191t tO this aftiele Tel floateFS �s. Legislation to Eliminate Duplicate Government Code Sections 9 October 2000 Page 5 of 7 Section 53635. Funds of local ageney, deposit or investment Authorized depositories; investment alternatives As far as possible, all money belonging to, or in the custody of, a local agency, including money paid to the treasurer or other official to pay the principal, interest, or penalties of bonds, shall be deposited for safekeeping in state or national banks, savings associations of federal association, credit unions, or federally insured industrial loan companies in this state selected by the treasurer or other official having the legal custody of the money; or, unless otherwise difeeted by the legislative body pursuant to Seetions 53601 , may be invested in the investments below that are described in Section 53601. delivefy, or by third pefty eustedial agreement. The transfer of seewities to the countefparty bank's eustaFner book entry aecount Fnay be used feF book entry deliveFy. For pufpases of this seetion, "e0unteflaaFty" means the other party to department may be USed fOF the physieal de"VeFy of the security if the seewity is he'd On the nafne of the loeal ageney. The provisions of Sections 53601.5 and 53601.6 shall apply to all investments that are acquired pursuant to this section. Legislation to Eliminate Duplicate Government Code Sections 9 October 2000 Page 6 of 7 EXHIBIT "B" ANALYSIS OF PROPOSED CHANGES Section 53607 1 . "Circumstances" is superfluous and therefore deleted from the title. Section 53601(h) 1 . "Deposit" substituted for "deposits" since singular case is correct. 2. "Savings association or federal association" from Section 53635 (h) substituted for "a state or federal association" since the former is a more recent amendment (1986) and is defined in Financial Code Section 5102. 3. "State or federal credit union" added since it was in Section 53635 but apparently omitted from Section 53601 . 4. "Deposit" substituted for "deposits" since singular case is correct. 5. "Chapter 4 of Part 1 of Division 2 of Title 5" added for purposes of clarification. It is in Section 53635 but was apparently omitted from Section 53601 . 6. Conflict of interest provision on negotiable CDs added since it was in Section 53635 (h) but apparently omitted from Section 53601 (h). Section 53601.5 1 . "Savings association or federal association" substituted for "federal or state association" in order to conform to terminology in Financial Code Section 5102. Section 53601.6 (a) 1 . "Pursuant to this article" deleted in order to facilitate incorporation of this section into Section 53635. 2. "Mortgage-derived" replaced with better, parallel sentence structure from Section 53635. Section 53601.6 (b) 1 . "Pursuant to this article" deleted in order to facilitate incorporation of this section into Section 53635. Legislation to Eliminate Duplicate Government Code Sections 9 October 2000 Page 7 of 7 Section 53631.5 1 . This section deleted since it duplicates Section 53601 .6, which is incorporated by reference into Section 53635. Section 53635 1 . Language that duplicates Section 53601 is eliminated, including subsections (a) through (m). 2. Sections 53601 .5 and 53601 .6 are incorporated by reference into Section 53635. 3. Section 53601 (I) is implicitly incorporated by reference into Section 53635. Previously, subsection (1) was in Section 53601 but apparently omitted from Section 53635. This subsection deals with investments authorized by bond indentures. Section 53635.5 1 . This section deleted since it duplicates Section 53601 .5. 1 EXHIBIT "C" SAMPLE DUPLICATE CODE SECTIONS _buPt_►CArc 411 53601.6. (a) A local agency shall not invest any funds pursuant to this article in inverse floaters, range notes, or mortgage derived interest-only strips. (b) A local agency shall not invest any funds pursuant to this article in any security that could result in zero interest accrual if held to maturity. However, a local agency may hold prohibited instruments until their maturity dates. The limitation in this subdivision shall not apply to local agency investments in shares of beneficial interest issued by diversified management companies registered under the Investment Company Act of 1940 (15 U.S.C. Sec. 80a-1, and following) that are authorized for investment pursuant to subdivision (k) of Section 53601. 53631.5. (a) A local agency shall not invest any funds pursuant to this article in inverse floaters, range notes, or interest-only strips that are derived from a pool of mortgages. (b) A local agency shall not invest any funds pursuant to this article in any security that could result in zero interest accrual if held to maturity. However, a local agency may hold prohibited instruments until their maturity dates. The limitation in this subdivision shall not apply to local agency investments in shares of beneficial interest issued by diversified management companies registered under the Investment Company Act of 1940 (IS U.S.C. Sec. 80a-1, and following) that are authorized for investment pursuant to subdivision (k) of Section 53601. DUPLICATE 53601.5. The purchase by a local agency of any investment authorized pursuant to Section 53601 or 53601.1, not purchased directly from the issuer, shall be purchased either from an institution licensed by the state as a broker-dealer, as defined in Section 25004 of the Corporations Code, or from a member of a federally regulated securities exchange, from a national or state-chartered bank, from a federal or state association (as defined by Section 5102 of the Financial Code) or from a brokerage firm designated as a primary government dealer by the Federal Reserve bank. 53635.5. The purchase by a local agency of any investment authorized pursuant to Section 53635, not purchased directly from the issuer, shall be purchased either from an institution licensed by the state as a broker-dealer, as defined in Section 25004 of the Corporations Code, or from a member of a federally regulated securities exchange, from a national or state-chartered bank, from a savings association or a federal association, or from a brokerage firm designated as a primary government dealer by the Federal Reserve bank. - D City of Palm Desert Internal Correspondence Date: 9 October 2000 Subject: Legislation to Simplify Government Code on Commercial Paper From: Thomas W. Jeffrey, Investment Manager / To: Members of the Finance Committee Recommendation That the City of Palm Desert sponsor legislation to complete the reform of the commercial paper section in the California Government Code. Background Commercial paper is the cornerstone of the City's short-term investment program since it is the most profitable short-term instrument. The City's ability to optimize its use of commercial paper is constrained, however, by a poorly structured commercial paper section in the Government Code. Currently, cities and special districts may invest up to 15 percent of their surplus money in commercial paper or, alternately, up to 30 percent of their surplus money if all of the commercial paper in the portfolio has a dollar-weighted average maturity ("WAM") of 31 days or less. In the Government Code, a description of the WAM formula takes up eight lines. Many cities, including Palm Desert and Los Angeles, are not investing up to the 30 percent concentration limit because they do want to be bothered with manually calculating the unnecessary and cumbersome WAM formula (we surveyed 30 cities with portfolios exceeding $100 million and only one was calculating it). Indeed, this was one of the reasons that the counties opted out of the same commercial paper Government Code section in 1999 by sponsoring legislation that created a separate county commercial paper Government Code section which assigns a single, flat concentration limit of 40 percent to counties, without any WAM formula. Unfortunately, since this reform legislation was limited to counties, cities and special districts have been left in limbo under the old 15/30 concentration limit. Legislation to Simplify Government Code on Commercial Paper 9 October 2000 Page 2 of 7 There are, in fact, several problems with the current treatment of commercial paper in the Government Code: 1 . Unnecessary Duplication. There are four commercial paper sections in the Code, two of which are duplicates (see Exhibit "C"). Only one section is needed. 2. Defective Structure. As indicated above, the WAM formula is inhibiting cities and special districts from investing up to the maximum concentration limit. 3. Potential Compliance Trap. The WAM formula is a potential compliance trap. Local agencies that wish to invest over the 15 percent concentration limit, may miscalculate portfolio commercial paper WAM, thereby violating state law. In the past, such an error might have gone unnoticed. With the recent enactment of AB 943, however, which requires local agencies to file semiannual investment reports with the State Treasurer, such a mistake could take on added political significance. The commercial paper concentration limit should be a single number, not two numbers and an eight-line formula that requires manual calculation. 4. Inappropriate Standard. As the counties indicated in their reform legislation, WAM is a concept that addresses interest rate risk -- the risk that the market price of a security will decline as interest rates rise. It makes no sense to include a WAM formula in the commercial paper section since the interest rate risk of commercial paper is extremely low due to its short maturity (270 days or less). Consequently, the inclusion of the WAM formula is unnecessary and inappropriate. In its 22 years of eligibility as an investment instrument for the California public sector, commercial paper has never been a source of losses for any local agency, due to defaults. This is due to the following factors: ➢ Existing state law adequately addresses the credit risk of commercial paper through the establishment of stringent credit standards. Local agencies may only buy commercial paper with ratings of Al/P1 , the highest short-term ratings possible, that shows a superior ability for repayment and a strong capacity to meet obligations. Legislation to Simplify Government Code on Commercial Paper 9 October 2000 Page 3 of 7 ➢ Cities and special districts with investment portfolios in excess of $100 million and at least one full-time investment officer ("sophisticated investors") typically buy commercial paper. Indeed, the 47 cities and special districts in this category have investment portfolios that are larger than those of 37 percent of the counties. In the cases of San Jose, Camarillo, and Orange County, $1 .7 million of collective investment losses resulted from the use of reverse repurchase agreements (for leverage) and U.S. Government securities (for speculation) -- not from the use of commercial paper. Staff recommends that the City of Palm Desert sponsor legislation to complete the reform of the commercial paper section of the Government Code by condensing and simplifying the commercial paper concentration limit for cities and special districts. Staff recommends a single, flat 25 percent commercial paper concentration limit, without any WAM formula. Cities and special districts do not need a 40 percent concentration limit like counties, since cities and special districts do not have the liquidity structure of county pools. A secondary legislative objective should be to re-incorporate the counties, with their 40 percent concentration limit, into the same Government Code section, in order to eliminate a second separate Code section (see Exhibits "A" and "B"). The cities of San Diego, Oakland, Ventura, Fresno, Carlsbad, and Cerritos, as well as the imperial Irrigation District and the Orange County Fire Authority, have agreed to submit endorsement letters in support of such legislation, if the City of Palm Desert elects to sponsor it. Fiscal Impact A commercial paper concentration limit of 25 percent would enhance portfolio profitability by giving the City the flexibility to purchase more commercial paper for debt service, should the need arise. cc: Paul S. Gibson, City Treasurer Attachments: (1) Exhibit "A" (2) Exhibit "B" (3) Exhibit "C" Legislation to Simplify Government Code on Commercial Paper 9 October 2000 Page 4 of 7 EXHIBIT "A" PROPOSED AMENDMENTS An act to amend Sections 53601 (g), 53601 .2, 53635(g), and 53635.2 of the California Government Code relating to local agency investments. , 9 9 Y (Additions are indicated by italics; deletions by striker) PROPOSED LANGUAGE (as it would read if enacted) Section 53601. Authorized investments (g) Commercial paper of "prime quality" and of the highest letter and number rating that Moody's Investors Service, Inc. ("Moody's) or that Standard and Poor's Corporation ("S&P") can assign. The corporation that issues the commercial paper must be organized and operating within the United States; have total assets in excess of Five Hundred Million Dollars ($500,000,000); and issue debt, other than commercial paper, if any, that is rated "A" or higher by Moody's or by S&P. Eligible commercial paper must have a maximum maturity of 270 days or less. Local agencies, other than counties, may invest no more than 25 percent of their surplus money in eligible commercial paper. Counties may invest no more than 40 percent of their surplus money in eligible commercial paper. Local agencies, including counties, may purchase no more than 10 percent of a corporate issuer's outstanding commercial paper. PROPOSED LANGUAGE (additions indicated by italics; deletions by striker) Section 53601 . Authorized investments; eircumstanees (g) Commercial paper of "prime" quality and of the highest ranking of of the Highest letter and nufnerieal number rating 89 PFOVided 4OF by that Moody's Investors Service, Inc. ("Moody's) or that Standard and Poor's Corporation ("S&P") can assign. that are The corporation that issues the commercial paper must be organized and operating within the United States and having; have total assets in excess of Five Hundred Million Dollars ($500,000,000) and having an "A" of Legislation to Simplify Government Code on Commercial Paper 9 October 2000 Page 5 of 7 , if any, as Eorperatie»; and issue debt, other than commercial paper, if any, that is rated 'A"or higher by Moody's or by S&P. papef rney not exeeed 180 days maturity nOF represent Fnafe than 10 Eligible commercial paper must have a maximum maturity of 270 days or less. surplus fneney that fnay be invested pufsuant to this seefien. An ad6tianal does met exeeed -31 days. "Dollar weighted avefage fnattifity" fneens the sum of the afneunt of eeeh outstanding eofnfnereial papef investment outstanding eofnmef eial paper. Local agencies, other than counties, may invest no more than 25 percent of their surplus money in eligible commercial paper. Counties may invest no more than 40 percent of their surplus money ineligible commercial paper. Local agencies, including counties, may purchase no more than 10 percent of a corporate issuer's outstanding commercial paper. Sectmon 53691 0 county fnay invest on eommeremal paper of "prime" quality of the highest ranking Of to isstiqng eeFperations that afe efganized and operating within the United States an "A" or Nghef Fating faf the issueF's debt, othef than eemmefemal paper, if any, , Legislation to Simplify Government Code on Commercial Paper 9 October 2000 Page 6 of 7 Section 53635. Funds of local agency; deposit or investment FWOOMS that We ffganiped and opefating within the United States and having total assets On excess of five h.,I-R..FdrePF-4 M....111ion do tars ($500,900,090) and having an "A" of highef rating fef the issuer's debt, other then eemmereial paper, if any, as provided f6F by Moody's Investors surp us money whoeh Fmay be invested pursuant to this seetion. An money in its eusteely, fnay be invested pufsuent to this subdivision. The additional 15 percent may be so invested only if the df)"aF weighted eveFage Fneturity ef the entiFe amount does not exeeed 31 days. "BelleF weighted eofnrneFeial paper multiplied by the number of days to mattlFity, Seetmen 53635 l ast in commefeial papeF Of "prime" quality of the highest F&9king Of of the highest 'etteF and i9tifnefieal rating as pfevided for by Moody's Investors to issuing eerpefations that aFe afganized and operating within the United States an "A" OF higheF Fatimg for the issuer's debt, OtheF then eemmefeial paper, Of any-, ageney's surplus money that figay be invested pufsuant to this seetion. NOF MOM this sectien Fnay be invested in the outstanding paper of any single issuing VV,rv' Legislation to Simplify Government Code on Commercial Paper 9 October 2000 Page 7 of 7 EXHIBIT "B" ANALYSIS OF PROPOSED CHANGES Section 53601 (g) 1 . Maximum maturity of commercial paper updated from 180 to 270 days, reflecting enactment of Assembly Bill 2220 in September 2000. 2. Commercial paper concentration limit for local agencies, other than counties, set at a single, flat rate of 25 percent. 3. Dollar-weighted average maturity ("WAM") formula deleted. Current WAM formula, if miscalculated, constitutes a potential compliance trap for local agencies. 4. Maximum concentration limit of 40 percent for counties preserved and incorporated into Section 53601 (g). Section 53601.2 1 . This section deleted since superfluous due to incorporation of counties into Section 53601 (g). Section 53635 (g) 1 . Subsection (g) deleted since superfluous due to incorporation by reference of Section 53601 (g) into Section 53635. Section 53635.2 1 . This section deleted since superfluous due to incorporation of counties into Section 53601 (g). EXHIBIT "C" SAMPLE DUPLICATE CODE SECTIONS GOVERNMENT CODE SECTION 53601 (g) Commercial paper of "prime" quality of the highest ranking or of the highest letter and numerical rating as provided for by Moody's Investors Service, Inc. , or Standard and Poor's Corporation. Eligible paper is further limited to issuing corporations that are organized and operating within the United States and having total assets in excess of five hundred million dollars ($500,000,000) and having an "A" or higher rating for the issuer's debt, other than commercial paper, if any, as provided for by Moody's Investors Service, Inc. , or Standard and Poor's Corporation. Purchases of eligible commercial paper may not exceed 180 days maturity nor represent more than 10 percent of the outstanding paper of an issuing corporation. Purchases of commercial paper may not exceed 15 percent of the agency's surplus money that may be invested pursuant to this section. An additional 15 percent, or a total of 30 percent of the agency's surplus money, may be invested pursuant to this subdivision. The additional 15 percent may be so invested only if the dollar-weighted average maturity of the entire amount does not exceed 31 days. "Dollar-weighted average maturity" means the sum of the amount of each outstanding commercial paper investment multiplied by the number of days to maturity, divided by the total amount of outstanding_ commercial paper. GOVERNMENT CODE SECTION 53635 (g) Commercial paper of "prime" quality of the highest ranking or of the highest letter and numerical rating as provided for by Moody's Investors Service, Inc. , or Standard and Poor's Corporation. Eligible paper is further limited to issuing corporations that are organized and operating within the United States and having total assets in excess of five hundred million dollars ($500,000, 000) and having an "A" or higher rating for the issuer's debt, other than commercial paper, if any, as provided for by Moody's Investors Service, Inc. , or Standard and Poor's Corporation. Purchases of eligible commercial paper may not exceed 180 days maturity nor represent more than 10 percent of the outstanding paper of an issuing corporation. Purchases of commercial paper may not exceed 15 percent of the agency's surplus money which may be invested pursuant to this section. An additional 15 percent, or a total of 30 percent of the agency's money or money in its custody, may be invested pursuant to this subdivision. The additional 15 percent may be so invested only if the dollar-weighted average maturity of the entire amount does not exceed 31 days. "Dollar-weighted average maturity" means the sum of the amount of each outstanding commercial paper investment multiplied by the number of days to maturity, divided by the total amount of outstanding commercial paper. i of ii EXHIBIT "C" SAMPLE DUPLICATE CODE SECTIONS GOVERNMENT CODE SECTION 53601.2 53601.2. Notwithstanding subdivision (g) of Section 53601, the board of supervisors of a county may invest in commercial paper of "prime" quality of the highest ranking or of the highest letter and numerical rating as provided for by Moody's Investors Service, Inc. , or Standard and Poor's Corporation. Eligible paper is further limited to issuing corporations that are organized and operating within the United States and have total assets in excess of five hundred million dollars ($500,000,000) and an "A" or higher rating for the issuer's debt, other than commercial paper, if any, as provided for by Moody's Investors Service, Inc. , or Standard and Poor' s Corporation. Purchases of eligible commercial paper may not exceed 180 days' maturity nor represent more than 10 percent of the outstanding paper of an issuing corporation. Purchases of commercial paper may not exceed 40 percent of the agency's surplus money that may be invested pursuant to this section. No more than 10 percent of the agency's surplus money that may be invested pursuant to this section may be invested in the outstanding paper of any single issuing corporation. GOVERNMENT CODE SECTION 53635.2 _ 53635.2. Notwithstanding subdi_vision (g) of Section_ 53635, the board of supervisors of a county may invest in commercial paper of "prime" quality of the highest ranking or of the highest letter and numerical rating as provided for by Moody's Investors Service, Inc. , or Standard and Poor's Corporation. Eligible paper is further limited to issuing corporations that are organized and operating within the United States and have total assets in excess of five hundred million dollars ($500, 000,000) and an "A" or higher rating for the issuer's debt, other than commercial paper, if any, as provided for by Moody's Investors Service, Inc. , or Standard and Poor' s Corporation. Purchases of eligible commercial paper may not exceed 180 days' maturity nor represent more than 10 percent of the outstanding paper of an issuing corporation. Purchases of commercial paper may not exceed 40 percent of the agency's surplus money that may be invested pursuant to this section. No more than 10 percent of the agency's surplus money that may be invested pursuant to this section may be invested in the outstanding paper of any single issuing corporation. ii of ii RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT APPROVING PAYMENT BY THE PARK VIEW OFFICE COMPLEX TO THE CITY'S GENERAL FUND TO COVER PARKVIEW'S PORTION OF THE CIVIC CENTER PARK MAINTENANCE AND LANDSCAPING COSTS. WHEREAS, the Park View Office Complex is an asset of the City adjacent to the Civic Center park area and should be responsible fortheir share of expenses and involved in the care and maintenance of the area surrounding such complex, including the landscaping and the parking lot and the atrium. WHEREAS, to equitably allocate the cost and expenses of maintaining the same, Park View Office Complex should absorb their appropriate portion of such costs. NOW, THEREFORE, BE IT RESOLVED, by the City Council and City of Palm Desert, California, as follows: 1. The Park View Office Complex should reimburse the general fund for their appropriate share of costs as determined by the Finance Department of the City associated with the maintenance of the Civic Center Park, and the landscaping for the adjacent parking lots and atrium areas. 2. The Finance Department of the City of Palm Desert shall, on an annual basis, determine the appropriate share of maintenance costs attributable to the Park View Office Complex and shall cause the same to be transferred from the Park View Office Complex funds to the general fund on an annual basis thereafter. 3. Reimbursement for the period of time since the City has owned such complex, being January 26, 1996, to and including June 30, 2000, is the sum of $1,000,000.00 and such amount should be transferred forthwith from the Park View Office Complex fund to the general fund. iDI RA Page 1 of 2 Resolution No. PASSED, APPROVED AND ADOPTED by the Palm Desert City Council this day of October 2000 by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: ATTEST: BUFORD A. CRITES, MAYOR APPROVED: SHEILA S. GILLIGAN, CITY CLERK CITY OF PALM DESERT, CALIFORNIA RA Page 2 of 2 CITY OF PALM DESERT FINANCE DEPARTMENT SELECTED LOCAL GOVERNMENT FINANCE BILLS ENACTED DURING 2000 CALIFORNIA LEGISLATIVE SESSION 3. Local Law Enforcement Funding (Counties and Cities). AB 1913, Chapter 353, Statutes of 2000. Existing state law establishes in each county treasury a Supplemental Law Enforcement Services Fund ("SLESF") and requires that moneys from this fund be allocated to counties and cities located within a county, in accordance with specified requirements for, among other things, front-line law enforcement services. Effective immediately, as an urgency statute, this legislation would increase the SLESF appropriation from the State General Fund to the State Controller, from $121 ,300,000 to $243,350,000. Fifty percent of this money would be allocated to cities and to counties to implement a comprehensive multi- agency juvenile justice plan. Front-line law enforcement services would be redefined to include juvenile justice programs. Each local agency's juvenile justice plan must be submitted to the Board of Corrections for review and approval in order to be funded. INVESTMENT REPORTING 1. California Debt and Investment Advisory Commission (Counties and Cities). AB 943, Chapter 687, Statutes of 2000. Existing state law establishes a 9- member California Debt and Investment Advisory Commission ("CDIAC"), and requires it to collect, maintain, and provide comprehensive information on all state and local debt authorization, sold and outstanding. Effective 1 January 2001 , this legislation establishes a new responsibility for CDIAC. CDIAC will collect, maintain, and provide information on local agency investments of public funds, and receive local government investor portfolio information. Consequently, cities and/or counties shall be required to submit copies to CDIAC of their: (1) Second- and fourth-quarter investment reports within 60 days of those quarter-ends; and (2) "Statement of Investment Policy" within 60 days of calendar year-end or within 60 days of amendment. Page 2 of 3 CITY OF PALM DESERT FINANCE DEPARTMENT SELECTED LOCAL GOVERNMENT FINANCE BILLS ENACTED DURING 2000 CALIFORNIA LEGISLATIVE SESSION FINANCIAL INSTITUTIONS 1. State Deposits (State, Cities, Counties, and Special Districts). AB 2708, Chapter 1036, Statutes of 2000. Existing state law governs the deposit of funds belonging to or in the custody of state and local agencies, in eligible banks, savings and loans associations, and credit unions. Effective 1 January 2001, this legislation revises the definition of an eligible bank, a savings and loan association, and a credit union to include receipt of an overall rating of not less than "satisfactory" in the financial institution's most recent evaluation by the appropriate federal financial supervisory agency of the financial institution's record of meeting the credit needs of the state's communities, pursuant to federal law. DEBT 1. Local Agency Investments (Cities, Counties, and Special Districts). AB 2220, Chapter 339, Statutes of 2000. Existing state law stipulates the amount and the quality of instruments in which local agencies may invest public money. State law limits local officials to investing in bankers's acceptances with a maximum maturity of 270 days and in commercial paper with a maximum maturity of 180 days. Effective 1 January 2001, this legislation reverses the maximum maturities of bankers's acceptances and commercial paper in order to conform to modern market practices. Local agencies will be authorized to invest in bankers's acceptances with a maximum maturity of 180 days and in commercial paper with a maximum maturity of 270 days. Page 3 of 3 MEMORANDUM CITY OF PALM DESERT To: All Committee/Commission Secretaries From: Sheila R. Gilligan Assistant City Manager/City Clerk Date: September 6, 2000 Re: COMMITTEE/COMMISSION HOLIDAY PARTY As we leave the summer months, it is time to begin scheduling fall and winter events. Please notify each of your committee/commission members to save December 9, 2000, for the City's annual holiday party. This year it will be held at the Desert Willow clubhouse beginning at 6:30 p.m. In preparation for this event,please provide Kristy Kneiding with at least three photographs that are representative of activities and/or projects your committee has participated in during the last year. They will be viewed during the program portion of the evening. I f%ou have any questions,please call Pat Scully at extension 352 and thank you for your continued support as we begin another new season. You are most appreciated. —'1 i SHEILA R. GILLIGAN ASSISTANT CITY MANAGER/CITY CLERK